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WorksheetsCONSUMER'S EQUILIBRIUM
Total questions: 23
Worksheet time: 46mins
Cardinal approach is
Utility approach
IC approach
A consumer is said to be in equilibrium when he is said to get
maximum satisfaction
maximum profit
According to the law of diminishing marginal utility, which of the following is true?
Consuming more of a good will always make a consumer worse off
Total satisfaction from a good increases at an increasing rate as more of the good is consumed
The total satisfaction from consuming more of a good always decreases as consumption increases
The satisfaction of consuming additional units of a good will decrease as consumption of the good increases
When marginal utility decreases, total utility will also decrease
What is used to measure a consumer's entire satisfaction or happiness of a choice?
Total utility
Marginal cost
Marginal utility
Total Revenue
Total costs
Which of the following best defines the term utility as it is used by economists?
when a market allocates resources in a way that maximizes consumer and producer surplus
the happiness or benefit a consumer experiences from a good
the extra benefit a consumer experiences when buying a good for less than she was willing to pay
the usefulness of a resource or factor of production to producers of a good
when an input can be used efficiently by producers
What is the difference between total utility and marginal utility?
Total utility is the dollar value of all consumption; marginal utility is the dollar value of one more unit of consumption
Total utility is consumers’ satisfaction of the last unit of consumption; marginal utility is consumers’ satisfaction from all consumption.
Total utility is the value to sellers of all production; marginal utility is the value to sellers of one more unit of production
Total utility is the value to sellers of all production; marginal utility is the value to sellers of all production less the costs of production.
Total utility is consumers’ satisfaction with all consumption; marginal utility is consumers’ satisfaction from one more unit of consumption.
This graph shows a consumer's total utility from eating hamburgers in a single meal.
Which of the following characteristics of the TU function is explained by the law of diminishing marginal utility?
the fact that the TU function slopes upward for some of the total utility curve
the fact that TU function's slope starts steep but decreases until the 3rd hamburger and then becomes downward sloping
the fact that the TU function starts at 0
the fact that the TU function is always positive
the fact that the TU depends on the quantity demanded
Marginal utility refers to:
the additional product produced as the firm adds one additional unit of an input
the additional utility that a consumer derives from consuming one additional unit of a good
the amount of utility divided by the number of units produced
all of the above
Which of the following is true if consuming one unit of good yields 100 utils and consuming the second unit of the good increases satisfaction by 20 utils?
The marginal utility of the first unit is 20
The marginal utility of the second unit is 80
The marginal utility of the second unit is 120
The total utility of consuming two units is 120
When offered another helping of stewed chicken at dinner, your dinner guest passes but asks for a second can of coke. We can conclude that your guest's
marginal utility of coke is positive but marginal utility of stewed chicken is zero or negative
total utility of stewed chicken is less than her total utility of coke
total utility of stewed chicken mashed potatoes exceeds her total utility of coke
marginal utility of stewed chicken is decreasing but marginal utility of coke is increasing
With the increase in consumption by one unit of the commodity, TU increases from 150 to 180, then MU is
50
1.2
30
0.833
The rate at which TU change in indicated by
MU
TU
Both option 1&2
None of the above
Consumer equilibrium occurs when ...
they have spent all of their income.
a person consumes quantities of three goods.
a person consumes quantities of two goods.
satisfaction is maximised for a given level of income.
